A few weeks ago I wrote an article about Flickr having passed Webshots in Alexa reach for the first time. Narendra Rocherolle, the founder of Webshots, took some time out to respond to my post over at his site NoSoapRadio and talk about the future of photo sharing on the internet. Although Flickr had recently passed Webshots in Alexa reach, Narendra was quick to point out that Alexa reach charts may not be the best way to measure the success of a photo sharing site up and offered up a chart that showed Photobucket actually having more Alexa “reach” than Flickr.
And of course Narendra is right. At the end of the day these charts are perhaps not the best way to measure the success of any internet property. One point about Photobucket and Flickr though. Although Narendra may be correct about the “reach” chart at Alexa, when looking at the total page views charts at Alexa Flickr still would seem to have more traffic. What does this tell me? This tells me that although there are fewer people exposed to Flickr than Photobucket at the present time, that those who are exposed to Flickr are using it more than those who are using Photobucket. In part I’d anecdotally chalk this up to Flickr having a more robust environment for community and thus Flickr being a “stickier” site. This is important because it is the passion of its users more than anything that is responsible for Flickr’s success. If Flickr is getting attention from fewer people but more intensely it will only be a matter of time before these Flickr users/evangelists continue to spread the gospel and convert more and more of their family and friends over to Flickr. This momentum is what will continue to push Flickr in the months ahead.
I know that over the Thanksgiving Holiday a big part of my Holiday was helping everyone in my family get set up on Flickr. Although most of them are free accounts, today my brother just told me that he in fact just upgraded to Pro. It is this kind of word of mouth marketing that will help propel Flickr. I wonder how big a day Thanksgiving actually was for new Flickr sign ups?
An interesting note from Narendra though about why Flickr’s had the success that it has can be found in the comments section of his post above: “Flickr’s innovations around tags and groups are nice, but my basic premise remains: they offered a robust product with a clean (no ads) interface and generated a lot of word of mouth and were happy to host photos for blogs (something livejournal and others stayed away from because of the cost structure). Flickr built a great product and generated heaps of PR, they never created a full-fledged business because Yahoo bought them before big cost issues set in.”
Here I think Narendra is right. I don’t know, but would suspect that Flickr loses money on my Thomas Hawk photostream. Although I certainly promote the service quite a bit and probably the marketing value that I personally provide outweighs their cost, on a standalone basis I would imagine my stream costs them more than $24.95 to maintain. I’m fairly active, have a decent amount of traffic and offer up high res photos for download. Additionally I use Flickr to host my blog photos. While my blog is not an A list blog it still gets a decent amount of traffic and Flickr pays the bill on this. Even if they lose money on my stream though I’d like to think I make up for it by being as big a Flickr evangelist as I can and that I help bring new users to the site. And I also think that they make money on less active Pro photostreams and in the end bandwidth cost vs. revenue may not be totally out of whack.
Still, I don’t think Flickr’s strategy of subsidizing bandwidth cost through low cost $24.95 accounts is necessarily a bad one. Although in the short run by maintaining a clean, low advertising, feature rich product this may cost them, they are generating huge growth with super valuable PR buzz. Yahoo! has the deep pockets to support the site’s growth financially and I’m sure that there will be substantial ways to monetize their growing user base down the road. And then of course even more than monetizing the Flickr user base (and if and how this is done will most certainly be responsibly) is the bigger picture implications that Flickr brings to Yahoo! and a whole new way to approach search. Flickr incorporating Boolean search at Flickr is just the first step. We will eventually see Flickr images integrated into Yahoo! Image Search and tagging and community tools built into overall web search at Yahoo! and implemented in many of their various properties.
So irrespective of how much revenue/expense might exist for the standalone Flickr today, they are very smart to run it as they do and it is to Yahoo!’s benefit to continue to promote the site and the buzz that comes with it. Yahoo! has the deep pockets to do this and I suspect in the end that’s largely why they were chosen as a partner for the company. Of course it does also help that Flickr is run lean and mean with a relatively small staff.